Title Page

Certification /Approval



Table of contents



1.1    Statement of Problems

1.2    Objective of Study'

1.3    Justification of Study

1.4    Scope and Methodology


CHAPTHER TWO: Review of Literature

2.1    Introduction

2.2    Introduction to Modem Insurance Practices

2.3    Types of Fraud

2.4    Causes of Fraud

2.5    Control of Fraud


CHAPTER THREE: Research Methodology

3.1    Introduction

3.2    Restatement of the Research Questions

3.3    Sources of Information

3.4    Methodology for this Study

3.5    Limitation of Methodology


CHAPTER FOUR: Presentation and Analysis of Data

4.1    Introduction

4.2    Characteristics and Classification

4.3    Presentation and Analysis of Data


CHAPTER FIVE: Summary, Recommendation and Conclusion

5.1    Summary of Major Findings

5.2    Recommendations

5.3    Conclusion









The problem of insurance fraud is world-wide. The Insurance Industry may have lost several millions of naira to fraudsters as a result of fraudulent Insurance claims and malpractices. Fraud constitutes a serious threat to the solvency of the Insurance Industry in Nigeria as it has become clearly seen that fraud is now an organised business perpetrated by some criminal elements in the society.


In addition, fraud is constantly being practised on adhoc basis by many other parties because of the adulation of wealth by the populace regardless of the source of wealth, prompted by the perverted value system that is now permeating every aspect of life in Nigeria.


According to L. H. Leigh:

The phenomenon of fraud is timeless and universal . The forms which fraud takes are contingent upon the economic system in which they are found. Fraud is not only widespread, it. is a big time business too.


According to Funmi Adeyemi:

A fraud is an act of deceit to gain unfair advantage. It embraces any cunning deception or trick employed to deceive or cheat another. Fraud signifies not only a criminal- deception but encompasses concealment of facts, as well as international perversion of truth in order to induce another person to part with something of value


The actors of Insurance fraud include untrustworthy investors, corrupt intermediaries, Insurance consumers, Insurance employees -and the criminal elements in the society.


According to Owen C. Okechukwu:

Fraud includes all means which human ingenuity can devise that are employed to gain an advantage by false suggestion or by suppression of the truth. It is a deliberate action with the intent to altering the truth for personal gain. The personal gain is not necessarily pecuniary, it may be done to please a member of a social group. It is thus recognised that any form of falsehood is fraud. It may be social or formal. There are about 160 registered Insurance Companies in Nigeria. As a result of the various fraudulent acts permeating the Insurance Industry, some members of the public now have negative impression about the Insurance Companies, that they are dubious business concerns runned by men whose negative attitude are ill-disposed to the correct interpretation of Insurance contracts.


According to Olabode Ogunlana, Chartered Insurance Practitioner:

Insurance frauds are not new in Nigeria and abroad; but the tempo and magnitude of it in Nigeria in recent times have assumed alarming proportions. Members of the public, Insurance officials and others now indulge in frauds.


Insurers now have to deal with a lot of false claims inflated values of cars, mostly second hand are now common occurrences. Usually such claims are preceded by inflated value of insured vehicles Sometimes, assessors acting on behalf of insurers assist in the perpetration of these frauds.


Solution he noted, has become elusive because of peoples perception of honesty and what is right is now warped. People think that it is right and normal for Insurance Companies to be defrauded. Car stealing syndicates grow by the day. Obtaining police reports for motor or burglary claims is near impossible.


Net all forms of fraud result in economic gains to the perpetrators. This study was concentrated mainly on those frauds that lead to economic gains by the perpetrators in the Insurance Industry (i.e. examining the various methods of perpetrating fraud, types of fraud, causes and possible control of frauds in the Industry using LASACO ASSURANCE PLC as a case study).



The objective of writing on fraud in the Insurance Industry are:

-        To identify the various ways and methods through which frauds are perpetrated by or with collusion of insurance employees, intermediaries, consumers and consultants.

-        To investigate the causes of fraud in the Insurance Industry.

-        To examine ways of safeguarding and or militating against Insurance frauds.



This project will be found interesting, educative and information by several interest groups based on the facts that, efforts are based on data collected to make this research work a laudable one.

i.             The effort of fraud on the Insurance Industry eroded the profit to be shared by the shareholders, reserves meant for plough back and tax to government account as revenue.

ii.           The profitability and stability of any financial institution plays an active role to sustain the economy, because the economy of any nation are principally handled and controlled by the financial sectors of which the industry will adversely affect the nation’s wealth as a whole.

iii.          The importance of this project to the students and researchers, would constitute a vital and literature for consultation towards enhancing their knowledge in reducing the way of frauds or if possible total eradication.

iv.          It is believed that the information contained in this project will create possible challenge and avenue for further research into the topic with the desire aim of preventing frauds in the Insurance Industry.



a.       Source of Data:

The sources of data will comprise of the primary and the secondary data.

The primary data would be made up of data collected from information retrieved from textbooks, journals, newspapers and Insurance Decree of 1991.

The secondary data would be made-up of data from personal interview through the use of questionnaire and direct observations. The sampling design would comprise of: all categories of staff working in both life and non life department of LASACO Assurance Plc as one of the leading Insurance company in Nigeria. Random sampling method will be used to select the sample size i.e. 30% of the entire population.

b.       Methods of Analysis:

The method of presentation and analysis of data for this research work will be done in a form based on the responses from the questions i.e. questionnaires. Also, respondents characteristics will be identified and classified.

c.       Scope and Period of Coverage:

The research work would cover LASACO Assurance Plc, Lagos as one of the leading companies in the Insurance Industry. Also emphasis would be on those frauds that leads to economic gains by the perpetrators in the Insurance Industry. However, the limitation to LASACO Assurance Plc, and few others among other Insurance. companies in the Lagos Metropolis and period of coverage for this research work was strictly due to time constraint slated for the completion of this research work and irregularities in academic calendar partly caused by persistent strikes, and which as a result does not permit enough time to go round other insurance companies in Lagos metropolis.

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